opinion

Investing in Your Retail Business' IT Infrastructure

Investing in Your Retail Business' IT Infrastructure

Why do so many adult retail owners pinch pennies on IT investments?

For as long as I’ve been in the technology business, I have found myself in discussions with retail business owners about how they make their technology spending decisions. Most tend to think about retail IT solely as an expense, rather than as an investment. This can be disheartening. We observe the highly positive outcomes of smart IT spending every single day, yet this negative mindset often keeps owners from making smart tech decisions that can boost their business. Let’s unpack this.

Retail IT is not a cost, it’s a catalyst.

The Right Tech Stack Is Fundamental to Your Business

A solid tech stack is just as important as other key investments. For instance, store owners are careful about choosing a location, since they want to maximize their exposure to people who will buy what they’re selling. Even though buying property or leasing space costs money, they don’t just see finding the perfect location as a cost. They know it’s the ticket to the right kind of foot traffic, which translates into bigger baskets and more transactions.

For the same reason, owners also put a lot of time and energy into hiring the right staff, since store employees can make or break a business — particularly in adult retail, where customers need to feel like they can share personal information. Hiring and paying people who are customer-focused, productive, skilled at selling, knowledgeable about product and able to work well together is not a cost, but an investment and a critical factor in every retailer’s playbook. A good staff ensures a good overall customer experience, low turnover and customer loyalty to both the associate and the brand. In other words, it’s an investment that pays off.

The right technology can also make a huge difference. Yet while location and staff are widely understood to be fundamental investments, technology is often seen merely as a necessary expense. That may be true for basics like internet, phone and email. However, many retailers throw POS, video and ecommerce sites, and marketing platforms into the same category. Wrong! These are true tech investments that, if designed and implemented properly, can deliver great results. In fact, they can impact revenue more than location and staff combined.

It’s all about optimizing operations while unlocking dormant revenue. With the right tech stack, you can save time and money, and open the door to new profit potential. Here are some examples.

Hard Data Beats Hunches

Many retailers in the adult space operate off of hunches instead of irrefutable data that shows them the true picture of what’s happening. The right technology enables you to analyze customer sales data, channel behaviors, product movement, demographics and other metrics. That means you can spot trends, optimize your product and pricing, and improve your marketing at every touch point. No hunches needed. What if you could impact your average ticket value and units per transaction because you can clearly see how your products are selling and which customers are buying what? This kind of thing can be done “automagically” with a simple report. Thanks to the insights it brings, your technology becomes a force multiplier for your business, not an expense.

Loyalty — Automatically

The right tech also helps you get “closer” to your customers. Knowing who your customers are, where they buy and how they buy gives you the data to make sure they feel seen, heard and personally serviced. This will keep them coming back loyally, buying more and ratcheting up your sales. It’s one big lucrative loop! All of this can be easily automated — and by doing so, you’re unlocking revenue potential that would otherwise have been lost.

Enable Your Associates

Retail associates today get a lot of flak regarding how they’re performing on the floor, but have you ever really audited what you’re doing to help them meet your expectations? Here’s how IT can help.

1. Optimize their time: When you have connected systems, information, reports and processes, you free up your sales associates’ time to get more tasks done more effectively. This, in turn, makes them feel more successful and happier while on the clock.

2. Upgrade their tools: When an associate can very quickly see what’s in stock, where it’s located, whether it can be drop-shipped, etc., we call it “actionable intelligence,” because with this info at their fingertips, they have a much better chance of ensuring that every inquiry converts to a close.

3. Power up their persuasion: The fancy term for this is “clienteling,” but it simply comes down to ensuring that every employee has all your customers’ past history, likes and dislikes, and loyalty info ready on tap. This makes cross-selling and upselling a cinch, because again, it’s all about intimacy — and empowering it.

Explore Your Options

On every retail P&L, some items are seen as drains while others are radiators. Don’t make the mistake of underestimating how important the right tech can be for retail success. Create a long-term strategic plan for implementing the technology that is right for you. Start by having a sit-down with your current technology provider to determine whether the systems you currently have, and the team supporting them, can deliver the kinds of insights you need. While there may be an initial investment required to implement new technology, the potential returns reach far beyond the costs. By embracing technology and leveraging its power to drive sales and improve operations, you can do more with less, while also ratcheting up your customers’ experiences.

In today’s environment, business analytics at your fingertips is a must-have, not a nice-to-have. If you’re not working with the systems and people that can deliver this to you, change the way you think about your tech. Because it’s not a cost, it’s a catalyst.

Sean Quinn is the CEO of All Point Retail, a retail technology company that offers managed retail commerce to retail businesses. He is a true veteran, both literally and figuratively. Bolstered by years of military experience in a variety of positions and commands, his strategic intelligence background laid the foundation for his passion for business intelligence through technology — especially in the retail arena.

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